Technological Forecasting & Social Change 78 (2011) 1280–1284

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Technological Forecasting & Social Change

Research Note

Kondratieff waves in global invention activity (1900–2008)

Andrey Korotayev⁎, Julia Zinkina, Justislav Bogevolnov"System Analysis and Mathematical Modeling of the World Dynamics" Program, Russian Academy of Sciences, 30/1 Spiridonovka, Moscow 123001, Russia

a r t i c l e i n f o

⁎ Corresponding author.E-mail address: akorotayev@mail.ru (A. Korotayev

0040-1625/$ – see front matter © 2011 Elsevier Inc.doi:10.1016/j.techfore.2011.02.011

a b s t r a c t

Article history:Received 28 October 2010Received in revised form 2 February 2011Accepted 22 February 2011Available online 24 March 2011

Our study has revealed an unusually clear K-wave pattern in the dynamics of the number ofpatents granted annually in the world per 1 million of the world population. In general we seerather steady increases in the number of patent grants per million during K-wave A-phases("upswings"), and we observe its rather pronounced decreases during K-wave B-phases("downswings"). This pattern apparently goes counter to the logic suggested by Kondratieff,Schumpeter and their followers who expected the increases in the invention activities duringB-phases and their decreases during A-phases. However, this contradiction is shown to beonly apparent. We suggest an explanation that accounts for the detected pattern withoutcontradicting the essence of Kondratieff–Schumpeter theory.

© 2011 Elsevier Inc. All rights reserved.

Keywords:TechnologyLong wavesKondratieff wavesGlobal dynamicsPatentsWorld Intellectual Property Organization

1. Introduction

A Russian economist writing in the 1920s, Nikolai Kondratieff observed that the historical record of some economic indicatorsthen available to him appeared to indicate a cyclic regularity of phases of gradual increases in values of respective indicatorsfollowed by phases of decline [1–6]; the period of these apparent oscillations seemed to him to be around 50 years.

Kondratieff himself identified the following long waves and their phases (see Table 1).The subsequent students of Kondratieff cycles identified additionally the following long waves in the post-World War I period

(see Table 2).

2. Mechanisms of K-wave dynamics. "Cluster-of-innovation" hypothesis

A considerable number of explanations for the observed Kondratieff wave (or just K-wave [11,22]) patterns have beenproposed. As at the initial stage of K-wave research the respective pattern was detected in the most secure way with respect toprice indices, most explanations proposed during this period were monetary, or monetary-related. For example, K-waves wereconnected with the inflation shocks caused by major wars [23–25]. Note that in recent decades such explanations went out offashion, as the K-wave pattern stopped to be traced in the price indices after World War II [10,26].

Kondratieff himself accounted for the K-wave dynamics first of all on the basis of capital investment dynamics [5,6,27]. This linewas further developed by Jay W. Forrester and his colleagues [28–31], as well as by A. van der Zwan [32], Hans Glisman, HorstRodemer, and Frank Wolter [33] etc.

However, in the recent decades the most popular explanation of K-wave dynamics was the one connecting them with thewaves of technological innovations.

).

All rights reserved.

Table 1Long waves and their phases identified by Kondratieff.

Long wave number Long wave phase Dates of the beginning Dates of the end

One A: upswing "The end of the 1780s or beginning of the 1790s" 1810–1817B: downswing 1810–1817 1844–1851

Two A: upswing 1844–1851 1870–1875B: downswing 1870–1875 1890–1896

Three A: upswing 1890–1896 1914–1920B: downswing 1914–1920

1281A. Korotayev et al. / Technological Forecasting & Social Change 78 (2011) 1280–1284

Kondratieff himself noticed that "during the recession of the long waves, an especially large number of important discoveriesand inventions in the technique of production and communication are made, which, however, are usually applied on a large scaleonly at the beginning of the next long upswing" [4,6].

This direction of reasoning was used by Schumpeter [34] to develop a rather influential "cluster-of-innovation" version ofK-waves theory, according to which Kondratieff cycles were predicated primarily on discontinuous rates of innovation (for morerecent developments of the Schumpeterian version of K-wave theory see, e.g. [11,13,22,35–46]). Within this approach eachKondratieff wave is associated with a certain leading sector (or leading sectors), technological system or technological style. Forexample the third Kondratieff wave is sometimes characterized as "the age of steel, electricity, and heavy engineering. The fourthwave takes in the age of oil, the automobile and mass production. Finally, the current fifth wave is described as the age ofinformation and telecommunications" [45,46]; whereas the forthcoming sixth wave is sometimes supposed to be connected firstof all with nano- and biotechnologies [19,43].

3. Review of empirical evidence

After Kondratieff himself, the idea that breakthrough innovations' clustering should occur in line with the K-waves was firstsupported by Schumpeter [34], but was then subject to severe criticism by Simon Kuznets [46]. It was only in the 1980s thatMensch [35] provided substantial empirical evidence of an approximately 50-year rhythm in the introduction of majorinnovations into the market. Haustein and Neuwirth [47], Van Dujin [48], and Kleinknecht [49] added substantial amount ofadditional empirical evidence in support of the Kondratieff–Schumpeter hypothesis. Nevertheless, Silverberg and Verspagen[50], applying Poisson regression to their basic innovation series, stated that there was no innovation clustering, but onlyoverdispersion, and the idea of a long wave in economic life being driven by clusters of basic innovations "has stretched thestatistical evidence too far" [50].

On the other hand, Kleinknecht and van der Panne [51] have made an attempt to overcome the divergences of various basicinnovation series compiled by different scholars (as these divergences could well have had a significant impact upon theconclusions made). They applied three variants of a weighting procedure to three basic innovation series independently compiledby van Dujin [48], Haustein and Neuwirth [47], and Mensch [35], coming to conclude that with each version of weighting, "thedifferences in mean numbers of innovations for pre-defined periods are highly significant", and "compared to the classical datingby Kondratieff, there is a 12 years lagged fluctuation in the innovation series" [51].

Thus, it is evident that there is still no unanimous agreement among the students of technological innovation dynamics withregard to the issue of long waves in technological innovation dynamics.

4. Test, discussion, and conclusion

In order to re-test the Kondratieff–Schumpeter hypothesis on the presence of the K-waves in the world invention activities wehave used theWorld Intellectual Property Organization (WIPO) Statistics Database information on the number of patents grantedannually in the world per 1 million of the world population in 1900–2008. For 1985–2008WIPO publishes direct data on the totalnumber of patent grants in the world per year [52]. For 1900–1985 we calculated this figure by summing up the data for all

Table 2"Post-Kondratieff" long waves and their phases.

Long wave number Long wave phase Dates of the beginning Dates of the end

Three A: upswing 1890–1896 From 1914 to 1928/29B: downswing From 1914 to 1928/29 1939–1950

Four A: upswing 1939–1950 1968–1977B: downswing 1968–1974 1984–1991

Five A: upswing 1984–1991 ?B: downswing ? ?

Sources: [7–18]. For a discussion of the possible datings of the 5th K-wave see, e.g., [12,19–21].

0

20

40

60

80

100

120

140

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Nu

mb

er o

f p

aten

t g

ran

ts p

er y

ear

per

mill

ion

of

the

wo

rld

po

pu

lati

on

Year

Fig. 1. Dynamics of number of patent grants per year per million of the world population, 1900–2008.

1282 A. Korotayev et al. / Technological Forecasting & Social Change 78 (2011) 1280–1284

countries (provided byWIPO in a separate dataset [53]). Data on the world population dynamics was obtained from the databasesof Maddison [54], UN Population Division [55], and U.S. Bureau of the Census [56].

The results of our calculations are presented in Fig. 1.It is easy to see that the figure above reveals an unusually clear K-wave pattern (note that a similar pattern has been detected in

the dynamics of patent applications by Plakitkin [57] who has not, however, appreciated that he is dealing here with K-wavedynamics). In general we see rather steady increases in the number of patent grants per million during K-wave A-phases("upswings"), and we observe its rather pronounced decreases during K-wave B-phases ("downswings"). Thus the first growthperiod of the variable in question revealed by Fig. 1 more or less coincided (with a rather slight, about 2–3 years, lag) with A-phaseof the 3rd K-wave (1896–1929); it was only interrupted by World War I when the number of patent grants per millionexperienced a precipitous but rather short decline, whereas after the war the value of the variable in question returned very fast tothe A-phase-specific trend line. The first prolonged period of decline of the number of patent grants per million corresponds ratherneatly (except for the above mentioned 2–3 years lag) to B-phase of this wave (1929–1945); the second period of steady increasein the value of the variable in question correlates almost perfectly with A-phase of the 4th K-wave (1945–1968/74), whereas thesecond period of decline corresponds rather well to its B-phase (1968/74–1984/1991); finally, the latest period of the growth ofthe number of patent grants per million correlates with A-phase of the 5th K-wave.

Note that most analyses of Kondratieff waves in technological innovation dynamics are done on more affluent and oldernational economies [28,34,35,37]. Hence, one might have thought that Kondratieff pattern would be clearly present in the patentdynamics of particular countries, while it is less likely to anticipate a world pattern. Thus, it might be a bit surprising to find that inthe US patent dynamics the K-wave pattern is significantly less pronounced than in the world dynamics (see Fig. 2, constructed onthe basis of the same datasets as Fig. 1).

In fact the K-wave pattern is still rather visible here, but it is not as clear and regular as in theworld invention dynamics (Fig. 1).This may be largely accounted for by the point that there exists a whole range of factors (e.g., major changes in a country's patentlegislation) which can have a strong impact on a particular country's patent activity [58], but are smoothed over in the long-rangeworld patent dynamics. Note that this phenomenon of certain patterns (including K-wave ones) being traced more clearly for theworld (rather than particular countries) has already been described by us with respect to demographic, GDP, and urbanizationdynamics [21,59–64].

Note, however, that this pattern apparently goes counter to the logic suggested by Kondratieff, Schumpeter and their followerswho expected the increases in the invention activities during B-phases and their decreases during A-phases. Yet, this contradictionis only apparent. Indeed, as we have mentioned above in Section 2, Kondratieff maintains that "during the recession of the longwaves, an especially large number of important discoveries and inventions in the technique of production and communication aremade, which, however, are usually applied on a large scale only at the beginning of the next long upswing" [4] (our emphasis).

It has been suggested to distinguish between "breakthrough" inventions and "improving" inventions/innovations (e.g., [20]).Namely breakthrough inventions during a B-phase of the given K-wave create foundations of a new technological systemcorresponding to a new K-wave; as was suggested by Kondratieff, they find their large-scale application during A-phase of thisnew K-wave (based on this new technological system), which is accompanied by a flood of improving innovations that areessential for the diffusion of technologies produced by breakthrough inventions made during B-phase of the preceding K-wave[20,44].

0

100

200

300

400

500

600

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Nu

mb

er o

f p

aten

t g

ran

ts p

er y

ear

per

mill

ion

of

the

US

A p

op

ula

tio

n

Year

Fig. 2. Dynamics of number of patent grants per year per million of the USA population, 1900–2008.

1283A. Korotayev et al. / Technological Forecasting & Social Change 78 (2011) 1280–1284

Note that the timingof periods of growth of the number of granted patents reflectsmostly the increase in the number of improvinginnovations. Indeed,within the total number of patents, only a negligible proportionwas granted for breakthrough inventions (whosenumber is very small almost by definition), whereas the overwhelming majority of patents was granted for numerous improvinginnovations. The exhaustion of the potential of the technological system of the given K-wave leads to the decrease of the number ofimproving innovations that realize thepotential providedby thebreakthroughswhich created the respective technological system.Onthe other hand, this very exhaustion of the previous technological system's potential for improvement creates powerful stimuli for thenew breakthrough inventions. However, in no way does the increase in the number of breakthrough inventions compensate for thedramatic decrease of the number of innovations improving the potential of the previous technological system. Hence, on the basis ofthis logic there are theoretical grounds to expect that during K-wave B-phases the total number of inventions (and patent grants) per1 million of population should decrease, whereas during A-phases we should observe a pronounced increase in this number (as acertain decrease in the number of breakthrough inventions is by far compensated for by a dramatic increase in the number ofimproving innovations) (note that a similar reasoning suggesting the increase in the number of granted patents during A-phases andtheir decrease during B-phases has already been proposed by Mensch [35], as well as by Devezas and Corredine [65]).

As we have seen, this is just the pattern that has been revealed by our test.

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Andrey Korotayev is the Head and Professor of the Department of Modern Asian and African Studies, Russian State University for the Humanities, Moscow(since 2004) and Senior Research Professor at the Institute for African Studies and the Institute for Oriental Studies of the Russian Academy of Sciences. Atpresent, together with Askar Akayev and Georgy Malinetsky, he coordinates the Russian Academy of Sciences Presidium Project "Complex System Analysis andMathematical Modeling of Global Dynamics". He is a laureate of the Russian Science Support Foundation Award in "The Best Economists of the Russian Academy ofSciences" Nomination (2006).

Julia Zinkina is amember of the Russian Academy of Sciences Presidium Project "Complex System Analysis andMathematical Modeling of Global Dynamics". Mainresearch interests: economic growth, dynamics of innovations, North Africa.

Justislav Bogevolnov is an Assistant Professor at the Faculty of Global Processes of the Moscow State University. Main research interests: fast phase transitions,emergence and movement of interphase borders, system analysis and mathematical modeling of global dynamics.